This saying is to be used to mock others when they are constantly using abbreviations way too much in a sentence. It is best used in mid-conversation, when you can interrupt them with "omg, I ca wor dow too ... " what your really saying, "omg, I cut words down too!" (trick: you need to sound over enthusiastic for them to feel like an idiot).
The conversation normally ends there. Work well done.
Me: "Fuck your dick. Ca Wor Dowing aint that spesh bro! How the fuck do you breath when you say all that?!"